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 grow expert tips

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GOING
GLOBAL
14 TIPS FROM LEADING EXPERTS AND
BOLD ENTREPRENEURS WILL HELP YOU
EXPAND INTERNATIONALLY

D
id you know that 95 percent of the world’s population lives
outside the United States? That going global isn’t really all
that difficult? That when you determine your business is
ready to go global, you are well on your way? That resources
are aplenty on the Internet to help you expand overseas?
Chances are, you’re one of the many business owners too
busy to pay attention to anything other than running your
company. Our goal here is to help you get your arms around
a host of issues to help you expand your business globally—
if that is, in fact, the right thing for your business.
We consulted with leading experts in the field of international business
and picked the brains of a new breed of young, bold international entre-
preneurs to learn the basics of global expansion. We came up with 14 solid
tips for getting started in the global marketplace. Read on to find out which
advice suits you.

Tip1 Determine how much you can afford to invest in your interna-
tional expansion efforts. Will it be based on 10 percent of your
domestic business profits, on a pay-as-you-can-afford process or on gut
instincts? “Early on, I just wasn’t ready financially, emotionally or intellec-
tually to go global,” says 37-year-old Greg Bernstein, president of Dallas-
based Global Outdoor Services, Inc., an outdoor advertising media buying
service that assists clients in buying outdoor media both domestically and
in Europe. “But years later, I was. It went great only because I learned how
to overcome language barriers, manage time differences and lock in on
exchange-rate contracts.”

Tip2 Plan at least a two-year lead time for world market penetration.
It takes time and patience to build a great, enduring global
enterprise, so be patient and plan for the long haul. Nobody knows this bet-
ter than 29-year-old Javae Wright Sr., CEO and chair of Leadaz International
Sportswear, Inc., an athletic footwear and apparel company in Champaign,
Illinois. Wright’s company relies on strengthening the mentality of athletes
abroad by promoting all that the company stands for: leadership.
In his company’s early days, after its launch in 2002, Wright’s biggest chal-
lenge in crossing borders was the long lead time for orders. “We would place
orders with our Chinese manufacturer and then expect delivery within a
week. We would forget that the goods—thousands of miles away—moved
slowly by vessel to the port of entry and then by truck. An international ship-
ment also required customs clearance, a factor that adds even more time on
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by laurel delaney

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grow expert tips

to the delivery schedule,” says Wright. “The lesson we learned Department of Commerce, Upper Midwest Export Assistance
and caution others on is to establish a grace period of about a Centers. “One of our key services, the Gold Key, actually sets
week if you want to meet customer deadlines.” up appointments with potential buyers, agents and distributors
for a company, making a business trip for any size company

Tip3 Pick a product or service to take or source overseas.


You can’t be all things to all people. Decide on
something, then stick with it. “And don’t take no for an answer,”
much more efficient and cost-effective.”
Sokalski advises never to stop developing your own foreign
network of customers and professionals at the top of your indus-
says Wright. “Persistence is more important than all else.” try. “Call them up. These people can be helpful to you in more
ways than you can imagine. If they see that you know your stuff,

Tip4 Conduct market research to identify your prime


target markets. Find out where in the world your
you will be surprised at how forthcoming they can be.”

product will be in greatest demand. Market research is a pow-


erful tool for exploring and identifying the fastest-growing,
most penetrable market for your product.
Tip7 Establish a direct or indirect method of export. It
all boils down to export strategy and how much
control you wish to exercise over your ventures. On the other
Take the case of Gregor Sokalski, a 31-year-old American hand, readiness to seize an opportunity is more important than
and an MBA graduate of the University of Chicago. Sokalski having your whole strategy nailed down beforehand. “You sim-
did a stint in London as an investment banker for a year ply must believe in yourself, your idea and your strategy,” says
before switching to an Internet B2B startup. He then started Sokalski. “Seven out of 10 will tell you it won’t work. It may
London-based Moxie, a high-quality takeaway food retailer not, but if you don’t try, someone else will.”
that was grounded on the principals of highly successful U.S.
business models. Had Sokalski conducted more extensive
market research, worked at a similar business for a while or
used a London food retailer business model instead of
Tip8 Hire a good lawyer, a savvy banker, a knowl-
edgeable accountant and a seasoned transport
specialist, each of whom specializes in international transactions.
U.S.–based model, he may have saved himself a lot of dough. You may feel that you can’t afford these professional services,

“MOST OF OUR SERVICES ARE OF LITTLE OR NO COST TO COMPANIES. ONE


OF OUR KEY SERVICES, THE GOLD KEY, ACTUALLY SETS UP APPOINTMENTS
WITH POTENTIAL BUYERS, AGENTS AND DISTRIBUTORS FOR A COMPANY,
MAKING A BUSINESS TRIP FOR ANY SIZE COMPANY MUCH MORE EFFICIENT
AND COST-EFFECTIVE.” —MARY JOYCE, U.S. DEPARTMENT OF COMMERCE
“Everything worked for Moxie but its location. We had but you can’t afford to do without them. Listen to their advice
great press and loyal customers, but just not enough of them without bias. Says Sokalski, “If you haven’t made it happen yet,
were there at breakfast,” says Sokalski. “You need to be partic- there is a lot to learn from these individuals who have.”
ularly sensitive to cultural issues in your foreign markets. This
may require a year or two of experience working with an estab-
lished local company before you forge out on your own.” Tip9 Prepare pricing, and determine landed costs. Be
ready to test out your price on your customer,
and then negotiate from there. For Leadaz, quotas—a specific

Tip5 Research the data to predict how your product


will sell in a specific geographic location. Doing
your homework will enable you to find out how much you will
unit or dollar limit applied to a particular type of good—on cot-
ton and polyester fabrics used to manufacture its products
became a pricing problem. Luckily, the quotas were lifted in
be able to sell over a specific period of time. “Attracting and January; if they had not been, Leadaz would have been forced
retaining sophisticated local talent will enable you to under- to source elsewhere or pay a 50 percent premium on the price
stand the local market and the industry much faster than any- of the products. Customers would have balked.
thing else,” says Sokalski. “In the end, you need to be running The next logical place to source was Mexico, where the
a business that is local, not simply an American outpost in a transportation distance was shorter but pricing was still high-
foreign land.” er, even without quotas. “It nearly became a wash,” says
Wright, “but we are relieved to continue with our Asian man-

Tip 6 Find cross-border customers. There is no busi-


ness overseas for you unless you locate customers
ufacturer, because they offer remarkable efficiency.”

first. The solution is to focus on a free resource such as the U.S.


Commercial Service, which provides customized market
research, general insights (including cultural), and market
Tip10 Set up terms, conditions and other financing
options. Agree on terms of payment in
advance, and never, ever sell on open account to a brand-new
reports on various industries in almost any market in the world customer. Many young exporting companies fear dealing with
with export potential. “Most of our services are of little or no either how to get paid or how to finance their transactions.
cost to companies,” says Mary Joyce, network director, U.S. Tess Morrison, director of the International Trade Center

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grow expert tips

at the University of Illinois, Urbana-Champaign, notes that


the U.S. government has programs to help exporters with
such issues, with a minimum of requirements: A company
Tip12 Make personal contact with your new targets.
Arm yourself with culture-specific informa-
tion, courtesies, professionalism and consistency. Your goal
must be in business for at least one year (although it may not should be to enter a different culture, adapt to it and make it
be exporting), and it must be profitable. Three critical ques- your own. “Visit on a regular basis,” says Ray Smilor, an inter-
tions to ask yourself: Can I sell a product? Can I collect nationally recognized expert in entrepreneurship and executive
money on the transaction? Can I generate a profit? If the director of the Beyster Institute, which promotes global entre-
answers are a resounding yes to all, then look into the SBA’s preneurship at the Rady School of Management at University
pre-export line of credit, which has several variations. of California, San Diego.
“The government will guarantee to your bank 90 percent of Yet finding good, trustworthy people with whom you can
the loaned amount,” says Morrison. “You can then borrow have a great business relationship is not easy. Wright indicates
against an international order to fulfill that order.” Check with it is best to find someone who is eager to help and enthusiastic
the nearest international SBA office or your state’s interna- about working together: “I found my key overseas manufactur-
tional trade office for help with the application paperwork. er through an 85-year-old person who later became a friend and
mentor to me. Sharing my story opened all sorts of possibilities

Tip11 Brush up on documentation and export licensing


procedures. If you find this too time-consuming,
hire a freight forwarder. Use their expertise to your advantage.
and taught me not to limit myself in terms of whom I sold to or
where I sourced my product.”

As in the case of Leadaz, a fierce conversation about how long


it takes to move product from one country to another would
have saved them from a lot of frustration, not to mention earn-
Tip13 Explore cross-border alliances and partnerships.
In charting your global strategy, consider join-
ing forces with another company of similar size and market
ing and preserving the trust of local buyers. presence that is located in a foreign country where you are
already doing business, or would like to. Gauge your readiness
to take on a 50/50 partnership. “Establish a foothold by work-
ing with a credible organization in the country where you wish
getting help to do business,” says Smilor. “But also identify a trusted and
knowledgeable on-site person. You might find this person—
who has a good personal network, knows how to work in the
 Need some additional help going global? Check domestic system, and can make introductions and connections
out these resources: for you—via references or previous experience.”
1. Center for International Business Education and Consider Sokalski, who is doing just that by helping foreign
Research (CIBER), at University of Illinois, Urbana- businesses bring their operations to the U.K. as a partner in
Champaign: www.ciber.uiuc.edu EUROPstart, a business development consultancy with
specialists in France, Germany, Italy, Spain and the U.K.
2. Country Watch: www.countrywatch.com

3. The Federation of International Trade


Associations: www.fita.org/index.html Tip14 Enjoy the journey. Never forget that you are
the most valuable business asset you have.
“Take a chance. If you fail, you will have learned an important
4. globalEDGE, from Michigan State University: lesson: You can get back up and do it a different way,” says
globaledge.msu.edu Wright. If he had to do it all over again, would he have gone
global, and so soon? “Most definitely. The relationships have
5. GlobeTrade: www.globetrade.com
been personally and professionally rewarding.”
6. International Trade Administration, U.S. Sokalski feels the same. “You will never take the first step
Department of Commerce: out of your comfort zone unless you acknowledge that failure
www.ita.doc.gov/index.html in the mechanics of creation is a possibility. Had Moxie
worked, I would not have as many interesting London-based
7. MyExports, a public-private partnership of the
opportunities, nor would I have amassed the valuable experi-
U.S. Department of Commerce and Global Publishers
ence that global business executives acknowledge. I am more
LLC: www.myexports.com/resource_links/index.html
prepared for next time—and there will be a next time.”
8. Office of International Trade, U.S. Small Business Now that you have determined your business is poised for
Administration: www.sbaonline.sba.gov/OIT new growth, get your arms around the world and expand
your business globally.
9. Stat-USA/Internet, from the U.S. Department of
Commerce: www.stat-usa.gov Laurel Delaney runs GlobeTrade.com and LaurelDelaney.com, both
10. U.S. government export portal: www.export.gov Chicago-based firms that specialize in international entrepreneurship.
She is also the creator of “The Global Small Business Blog” (border-
11. U.S. Commercial Service: www.buyusa.gov/home buster.blogspot.com), which is highly regarded for its coverage on glob-
al small business. You can reach Delaney at ldelaney@globetrade.com.

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